The 2018 Pinecrest Real Estate Market Update
How did Pinecrest homes perform in 2017 and what to expect from 2018?
We would like to update you on the status of the Pinecrest home market. As always we will discuss the past year and we will look at 2018 to see what the Pinecrest real estate market will bring. With so many different reports about the Miami market, it is often hard to get the information that is really useful for you. This report focusses only on the Pinecrest market and divides the market into 6 different price ranges.
The Price Ranges in the Pinecrest Real Estate Market
In the table above we provide you with the sales prices per SF for Pinecrest homes in 2017 and we compare these prices with previous years. As can be seen from the data, prices have consistently gone up across the different price ranges, although the luxury market has seen some price corrections since 2016. In the last few years Pinecrest gained in popularity because of its excellent schools and real estate options while asking for more affordable prices than other desired Miami neighborhoods. This surge in demand resulted in rapid price increases. Many buyers looked for older homes to remodel or to rebuild from scratch, which generated the enormous price increases at the lower-end of the market. Many developers and “home flippers” built brand new luxury homes resulting in an increased supply of high-end multi-million Dollar homes. With a massive supply of luxury homes, inflated prices and less demand we see that prices in the higher-end of the market are taking a hit.
The two graphs below show you the months of inventory, one of the most important indicators in real estate. Months of inventory show you the supply and demand relationship which is key in predicting future price changes. As you can see from the tables, the market up till $2M is between a sellers and a neutral / balanced market, while the homes in the $2M+ price range are experiencing a buyers market. Given the high amount of months of inventory we expect the luxury market ($2M+) to see some more price corrections in order to absorb the supply. The market below the $2M range seems to show healthy numbers of inventory leading us to believe prices will remain stable or grow slightly.
What does sellers or buyers market mean?
- A sellers market (With 6 or less months of inventory – and 12 or less months in the Luxury $1M+ market) means that there is more demand than supply, mostly leading to an increase in prices and providing sellers with an advantage
- A buyers market (With 9 or more months of inventory – and 18 or more months in the Luxury $1M+ market) means that there is more supply than demand. Prices are likely to decrease in order to absorb the supply.
- A neutral market provides for a perfect balance in which neither party has an advantage and prices are likely to remain stable
Buying a Pinecrest home in 2018
We are bullish regarding the Pinecrest market, but in every market you need to pay the right price. In the luxury end of the market, sellers will soon understand that their properties will be sitting too long on the market if they won’t adjust their prices. The table below provides you with an overview of the lowest prices per SF, the average and the highest prices per SF in 2017. This table provides you with an insight as to what you should be offering for a Pinecrest home for sale. For example a fixer upper for $1,3M that is priced at $350 per SF will not be a good deal. As you can see that is the average price in the market while the lower-end (the fixer-uppers) is selling at approximately $250 per SF. If the listing is asking $550 per SF you should only go ahead if it is well finished or a much better home than any other one on the market. With other words; only pay top dollar if the property justifies that price.
When looking to make an offer one should know the below data. These are differences in percentage between the original asking price and the sales price. You can see that in 2014, the year in which prices increased the most, there was only 6% of negotiability in the different markets, today that is 12%! With other words a property listed for $1,5M might sell for $1,3M.
Trends in Pinecrest
The table below shows the price range distribution over the years. While 2012 saw 17% of homes being sold below $500K, today that is less than 1%. On the other hand the $1M+ market increased from 30% to 54% of total sales.